Voluntary Separation

The agenda packet for Monday’s special City Council meeting to discuss the Voluntary Separation Program (VSP) is missing a few things:

1) An analysis of how much this program could cost us. Surely the city must know how many of its employees are eligible, since only those with 20 or more full years of continuous service qualify. There must be a memo or some other backup material to show why this is such a good plan. To withhold it is either careless or naughty.

2) Some mention of where the money for the VSP would come from.

3) A provision for how long a separated employee must remain separated from the city. Otherwise, we could end up with some pretty interesting scenarios, and I mean “interesting” in the sense that we wouldn’t care for them.

5 thoughts on “Voluntary Separation”

  1. My experience with early retirements is limited and is only in reference to the IMRF. If a municipality offers an early retirement option to its employees, they are going to get an increase in their IMRF assessments. This is not readily predictable in advance, and is predicated on the nature of the situations of each of the early retirees. When one of my employees took an early retirement, he soon realized that he could not afford health insurance for his wife and himself, and he was a few years away from Medicare eligibility. I spoke to the IMRF representative, and was told that if he took an early retirement, he could never work for any IMRF related entity again. Unless things have changed since 2004, any person who takes an IMRF early retirement would not seem to be able to work at the city of DeKalb, or any other entity associated with that pension fund. I do not know if this would be the same for any other pension funds. I expect the IMRF assessments to rise anyway, since their investments have not been as productive as they were in the past, and to remain solvent and actuarially sound they must maintain a good level of funds under investment.

  2. Steve, I actually was thinking more about the management employees when I made the comment but certainly am glad to have the IMRF information.

    They need to save a MINIMUM of $2 million per year and are determined to do so by getting rid of two dozen or more workers. I just checked, don’t see the side letter with the AFSCME contract online and cannot remember whether the no-layoff provision (in return for the wage freeze) was for the duration of FY2009 or to the end of the contract, which is December 31, 2010. If Baker is right and it’s the latter, they must be praying that a goodly number take the bait.

    Then there’s this (from the Chronicle):

    When asked how the no-layoffs clause of the AFSCME contract would be honored in case layoffs are needed, Mayor Kris Povlsen said there were a number of options being explored.

    “We’ll just have to cross that bridge when we get there,” he said.

    Meaning what? That he doesn’t know what the contract says? That it doesn’t matter what the contract says?

    Chronicle also notes that management employees will be eligible at only 10 years of service. This makes at least the second item of interest that was not to be found in the online agenda packet.

  3. Dear Steve,

    Yes, I’m back, this time to question whether these in fact would be classified as voluntary retirements. Does Voluntary Separation Program = Voluntary Retirement Program? Or is it a voluntary layoff, after which IMRF credits can be bought back, say, with some of that $20,000?

    Ain’t semantics fun?

    I will try to look up more of this stuff later in the week.

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